Back From the Future:
Notes From CES 2006
Most business conventions are relatively boring affairs. Keynote speeches consist of some dude or dudette at a lectern. If you’re lucky, PowerPoint slides are involved. But at the annual Consumer Electronics Show in Las Vegas, it’s all razzmatazz and showbiz spread out across some 1.5 million square feet of exhibit space (my feet still hurt). This year’s show took place from Jan. 4-7, and as usual, it had its moments. Where else can you find Microsoft CEO Bill Gates and "pop star" Justin Timberlake on stage and NSYNC?

I have been attending this show on and off for about 10 years now. While the show remains one of the largest and loudest in the industry, this year I have noticed an important development - the undisputed cooperation between the content guys (i.e., record labels, Hollywood studios, celebrities, and the like) and the geeky engineers who create these wondrous gadgets. This has been building for years, but the 2006 CES seems to indicate that the closeness between these camps is real and unforced.

In fact, this new generation of gadgetry is tearing a huge hole in the fabric of music time and space. Indie artists and labels are gaining the kind of direct access to fans they might have only dreamed about a few short years ago. Managers are finding that they can pursue marketing opportunities that extend beyond simply groveling to A&R guys for a deal. Club owners are finding out about new acts not through "industry circles" but through the Internet and even through one of their bartenders who has been rocking out to some local band downloaded to an MP3 player.

And the labels? They’ve finally stopped running scared and started to salivate over the potential profits that these technologies can deliver. "The barrier to get to market has been reduced," said Ted Cohen, senior vice president of digital development at EMI Music, at one CES panel. "We know that every model we come up with is disruptive."

Did you get that? A major label guy accepting and even embracing disruptive technologies that change the way record labels make money? "These are all opportunities for the music industry, which needs to reinvent itself," Cohen said. Added Ron Chandhok, VP of Engineering and Market development for Qualcomm’s MediaFLO Technologies, which plans to launch a mobile video streaming service this year: "Over the next several years, audio content providers will have many options for distribution." That may turn out to be an understatement.

This year’s CES largely focused on content services that will make all of these incredible devices sing. Keynotes included talks by luminaries at Google, Intel, Microsoft and Yahoo!, for crying out loud: This is not your father’s stereo-and-TV convention. One theme of the show was the ubiquity of music. Over the next couple of years, it may be difficult for anyone to avoid music, even if they try. It will be available through just about every device—whether in the living room or the den, pressed your ear or worn on your belt. Even the music player on your PC is becoming a virtual record store: Gates’ speech included a visit by MTV President Van Toffler, who introduced the MTV’s new "Urge" music service that will be integrated into Windows Media Player 11 coming out this year.

People have talked about this phenomenon of "music everywhere" for years, but copyright issues and other endless problems have stopped it from becoming reality. Not anymore. iTunes proved that technology and content owners can play nice. And since then, everyone from the new Napster to Yahoo! Music Unlimited, Microsoft and others are figuring out business models that revolve around digital music downloads and streams. Cohen even suggested bundling ringtone and MP3 sales into one price to give people more of an incentive to buy digital songs. "We have to continually show value," he said.

He’s right. And at CES 2006, I marveled at how much the next generation of devices will empower music fans to hear what they want, when the want, how they want. One example is Motorola’s new iRadio product announced at the show. It’s a new subscription music service allowing select Motorola handhelds to become a sort of virtual radio on the go. "We’re trying to bring choice and personalization to consumers," says Dave Ulmer, Motorola’s senior director of marketing for digital media services. "Consumers are getting fed up with the same old selection given to them by these commercial entities."

To avoid clogging mobile networks, iRadio devices don’t stream content over the air. Instead, consumers can download up to 10 hours of audio content to their iRadio device, choosing from six Internet radio stations at a time from among 435 stations "covering every genre and topic you could imagine,’ says Ulmer. Using the Bluetooth wireless standard, consumers can also stream content from their iRadio handheld directly into a car stereo (provided they have a Bluetooth-enabled stereo or spend about $150 to install an adapter).

Meanwhile, the buttons on the car stereo are automatically assigned to the six downloaded iRadio stations. Consumers can "tag" a song or artist with the push of a button to later purchase the song or album. And here’s the best part for indie artists: Motorola has created the "Get-Heard" network through which unknown artists can create their own iRadio stations that feature their own music. "It will be a great thing for consumers," said EMI’s Cohen, referencing iRadio. "And it will be a great thing for artists as well. It gets Internet radio off of the desktop."

Other big-media types are also starting to embrace the grassroots as a business strategy. News Corp., for example, just bought MySpace.com in order to better promote its content properties to the viral Internet community of friends, many of who coalesce around their mutual music interests (News Corp. owns Twentieth Century Fox, Fox News and other media properties). Lucy Hood, News Corp.’s senior VP of Content and Marketing, called MySpace "an exciting place to be" for the company during one panel. And when asked whether all of this consumer and device liberation meant that the gatekeepers’ days were numbered, she exuded confidence. "You’re going to see trends in the opposite direction," she said, predicting that relationships between entities such as mobile service providers and content companies will get "deeper" as devices enable multimedia, including streaming music. We’ll see. Either way, consumers will get the music they want—whether through industry-endorsed means or on their own through underground methods.

That underground feel seems to be in fashion at the moment. And nowhere was that more apparent than when Google co-founder Larry Page announced the new Google Video Store during his keynote presentation. The service actually allows anyone to sell video content over the Internet through Google’s network—whether the content is the latest Madonna video or a home movie of the family cat singing "American Pie." (Okay… that would be an interesting clip). The really intriguing part is that Google is actually allowing content owners to each set their own price, as well as their own digital rights management scheme. No one is locked into a "take it or leave it" system that requires a certain price or DRM plan (as is currently the case with many music download sites).

Instead, Google wants to "put the content providers in charge," Page said. That’s quite a revolutionary idea—especially when it applies even to the lowly indie artist or label. Maybe you want to give away that music video or podcast for the free exposure. Maybe you want to charge 25 cents. Or more. It’s up to you. Of course, none of this means it will be any easier to break through the noise out there, but at least it starts to create a bit more multimedia parity in the world.

The bottom line is that CES was all about a robust multimedia experience, which for many people means music or music-related video content from anywhere at any time. Everybody from major labels to indie artists needs to make sure their content is available for these devices. If CES 2006 suggested one thing, it’s that getting that next album up on all of the music download sites is really just the beginning. Consumers are in charge. They want easy access to music. Understanding all of these new technologies, services and devices is imperative for artists and labels at all levels. We can only wonder what CES 2007 will bring. I plan to be there. Maybe you should to.

(Mike Grebb is a writer, journalist and singer/songwriter based in Washington, D.C. He has written for numerous publications, including Wired and Billboard. His debut solo record, Resolution, is available at www.mikegrebb.com, as well as digitally on iTunes, MSN Music, Musicmatch, Yahoo! Music Unlimited and other sites. You can also be his friend on MySpace!)